The Real Effect on Corporate Taxes

Goldman Sachs has run the numbers. Over the coming decade, the GOP’s proposed reduction in the corporate tax rate from 35 percent to 20 percent would reduce actual corporate taxation by around 3 percent. That’s because there’s a big gap now between the statutory rate and the effective rate. Corporations tend to have top-drawer tax lawyers and accountants. Why haven’t we heard more about this? Politics, I’d say. The GOP wants to get maximum credit for cutting taxes to goose the economy (despite the lack of evidence that putting big bucks in corporate coffers now would do that), and the Democrats want the GOP’s gift to big corporations to look as enormous as possible.